A cashless society could be what consumer life after the COVID-19 pandemic looks like, but older Americans may find it hard to adjust to this new reality, according to Plamen Nikolov, assistant professor of economics at Binghamton University, State University of New York.
COVID-19 may persist on money for a more extended period than cardboard or paper-based products because cash in the U.S. is composed of 25% linen and 75% cotton, not paper. Although not using cash might help to stop the spread of disease, it also comes with many trade-offs. One of these trade-offs relates to older Americans.
"Older Americans are not as tech-savvy as younger generations and will likely be affected negatively due to their more limited use of electronic forms of payments," says Nikolov. "Other vulnerable populations (e.g., low-income populations) who do not use mobile forms of payments are also likely to be negatively affected."
About 3 in 10 Americans make no purchases with cash in a typical week, according to the Pew Research Center. And although fewer and fewer adults are using printed or minted U.S. currency these days, one demographic group that is slow to adjust is older adults.
"Prior to the COVID-19 epidemic, about one-third of Americans under the age of 50 made no purchases in a typical week using cash," says Nikolov. "The same number is only a fifth among Americans above the age of 50. Furthermore, the slow adjustment to electronic or mobile forms of payments among older adults will likely have some implications for consumption and consumer expenditures.
"Due to the more limited use of mobile forms of payments among older Americans, it will be interesting to see what impact on consumer expenditures or the type of consumer expenditures, the need to switch to mobile types of payments will have among older Americans."